|
An Act TO REDUCE THE STRESS ON LOCAL PROPERTY TAXES THROUGH ENHANCED PENSION FUND INVESTMENT |
Be it enacted by the Senate and House
of Representatives in General Court assembled, and by the authority of the
same, as follows:
SECTION 1. Section 22 of said chapter 32 of the General Laws, as so appearing, is hereby amended by striking, in line 1043, the words “electing to participate” and inserting in place thereof the following:- participating
SECTION 2. Said section 22 of chapter 32 of the General Laws, as so appearing, is hereby amended by inserting after line 1121 the following:-
(d) The commission shall annually review the investment performance of all systems using data compiled as of January 1 of the year in which said review occurs. Any system found by the commission to have a funded ratio of less than 65 per cent and an average rate of return during the previous 10 years that is at least 2 percentage points less than that of the PRIT fund rate of return over the same period shall be declared underperforming by the commission. The commission shall notify in writing any system deemed to be underperforming pursuant to this subsection that said system shall transfer ownership and control of all of its assets to the PRIM board. Such notice shall include, without limitation: (i) a financial report on the system in question; (ii) a description of the rights and duties of the PRIM board; and (iii) a schedule for the transfer of ownership and control of a system’s assets to the PRIM board pursuant to this subsection. A transfer of the ownership and control of a system’s assets pursuant to this subsection shall be in perpetuity.
The PRIM board shall hold such assets in trust for the participating systems. The PRIM board shall credit assets and earnings on such assets to the individual systems. The PRIM board shall calculate regular interest as defined in subdivision (6) to allocate earnings among the various funds of each system. The board of each system shall continue to administer the system in accordance with sections 1 to 28, inclusive, including the maintenance of accounts in accordance with the funds provided for in this section. The PRIM board shall transfer monies to the various funds of the participating systems to allow them to carry out their duties pursuant to this chapter. The board of each participating system shall notify the PRIM board of the amounts needed for the various funds for the next fiscal year no later than 90 days before the start of the next fiscal year. The PRIM board shall develop a schedule of transfers to be made to said systems during the next fiscal year and notify the systems of that schedule no later than 30 days prior to the start of the next fiscal year. The PRIM board shall transfer such amounts in accordance with said schedule during the course of said fiscal year. From time to time such boards may make supplemental requests of the PRIM board if the initial request is found to be insufficient. Within 30 days of such request, the PRIM board shall approve or deny such request. Any denial of such a request must be accompanied by a written statement of the reasons therefor.
The superior court department of the trial court shall have jurisdiction to consider any claim challenging the validity of a transfer of ownership and control of the assets of a system to the PRIM board pursuant to this subsection. Any system aggrieved by the imposition of this subsection may, within 60 days of receipt of notification that said system has been classified by the commission as underperforming, bring a civil action presenting its claim.
SECTION 3. Said section 22 of chapter 32 of the General Laws, as so appearing, is hereby further amended by striking, in line 1122, the letter “(d)” and inserting in place thereof the following:- (e)
SECTION 4. Said section 22 of chapter 32 of the General Laws, as so appearing, is hereby further amended by striking, in line 1137, the letter “(e)” and inserting in place thereof the following:- (f)
SECTION 5. Notwithstanding any general or special law to the contrary, pursuant to section 2 of this act the public employee retirement administration commission established pursuant to section 49 of chapter 7 of the General Laws shall review the investment performance of all systems using data compiled as of January 1, 2007. Any system found by the public employee retirement administration commission to have a funded ratio of less than 65 per cent and an average rate of return during the previous 10 years that is at least 2 percentage points less than that of the rate of return of the pension reserves investment trust established pursuant to subdivision 8 of section 22 of the General Laws over the same time period shall be declared underperforming by the public employee retirement administration commission and shall transfer ownership and control of all of its assets to the pension reserves investment management board in accordance with the provisions of section 2 of this act.
SECTION 6. Notwithstanding any general or special law to the contrary, any pension system established pursuant to chapter 32 of the General Laws and deemed underperforming pursuant to the provisions of section 2 of this act may voluntarily transfer ownership and control of all of its assets to the pension reserves investment management board established pursuant to section 23 of chapter 32 of the General Laws. The decision to voluntarily transfer ownership and control of all of its assets to the pension reserves investment management board shall be made by the retirement board of each system, subject to the approval of the board of selectmen in a town, the mayor in a city, the city manager in a city with plan D or plan E form of government, and the county commissioners in a county. A system deemed underperforming pursuant to the provisions of section 2 of this act shall exercise its right to voluntarily transfer ownership and control of all of its assets to the pension reserves investment management board pursuant to this section prior to the effective date of this act.
SECTION 7. Notwithstanding any general or special law to the contrary, the public employee retirement administration commission established pursuant to section 49 of chapter 7 of the General Laws shall file an annual report with the house and senate committees on ways and means and the joint committee on public service detailing the average rate of return and funding level of each retirement system; provided further, that the first such annual report shall include the average rate of return and funding level of each retirement system since 1985.
SECTION 8. This act shall take effect on October 1, 2007.